Pennon Group plc returned to profitability in 2025/26, according to its Full Year Results for 2025/26 published today – the Group is reporting a statutory profit before tax of £114.4 million compared to a loss of £72.7 million in 2024/25.

Financial highlights during the year included a 55% increase in underlying EBITDA as a result of increased revenues and a focus on cost  management while regulated water revenue was up c.25% year- on-year, driven by the benefit of increased regulatory revenue allowances and higher consumption.

Pennon said it had made a focused start to its AMP8 capital investment programme, with £643.6 million of capital investment across the Group in 2025/26 - reflecting £588.5 million of investment in its water businesses as it focuses on delivering on AMP8 commitments.

The Group saw a Return on Regulated Equity (RoRE) of 6.7% in 2025/26, with outperformance on financing and totex partly offset by ODI penalties. Pennon said exceptional storms and sustained rainfall, coupled with a step up in targets and penalty rates from the beginning of the new regulatory cycle created operational pressures across water and wastewater for 2025/26, resulting in a net operational ODI penalty of c.£42.0 million.

Full year dividend is £138.2 million (2024/25: dividend £133.7 million), resulting in a dividend per share of 29.29p.

Pennon’s regulated water and wastewater business are South West Water, Bristol Water, Bournemouth Water and SES Water, and in the B2B Retail Services sector the Group owns Pennon Water Services and water2business (W2B).

Operational highlights

Commenting on its operational performance, Pennon said its Pollution Incident Reduction Plan continues to deliver tangible improvements with a c.34% reduction in year-on-year on pollutions, and normalised pollutions reducing by c.53%. However, the provisional assessment for the 2025 EPA rating is 1* as pollution incidents, although improved, were still above target.

Storm overflow use reduced by 17% reduction over the past year, with spill duration reducing c.25% reflecting continued investment in infrastructure, despite South West England receiving around 150% of average rainfall in November and December.

The results say that water quality performance remains strong with sector leading performance in SES and strong performance in South West Water. Water resources exceed the target position at 98%, aided by investment in storage resilience and high rainfall.

Exceptional storms and sustained rainfall coupled with a step up in targets and penalty rates from the beginning of the new regulatory cycle created operational pressures across water and wastewater for 2025/26, resulting in a net operational ODI penalty of c.£42.0 million.

Investment in Pennon Power has continued - two solar projects were fully constructed by March 2026, with Aberdeenshire at full generation and Fife energised and in commissioning stage. Pennon Power plays a central role in driving gains in clean energy, enhancing energy resilience, and reducing exposure to energy market fluctuations, while also delivering sustainable financial returns and contributing to overall Group profitability. Two further sites are on track for energisation and commissioning in 2026/27.

With a renewed focus and a strengthened leadership team, Pennon says it is “well positioned to deliver for customers, communities, and the environment in the years ahead.“

The Group says that investments, combined with a refreshed and enhanced operational plan it is developing, will benefit customers and communities across its regions, whilst creating a 34% growth in RCV over AMP8.

The year has marked a significant transition in Pennon’s leadership. Susan Davy stepped down as Chief Executive in December 2025 after 18 years of service and Keith Haslett joined Pennon as Chief Executive on 1 April 2026. In February 2026 the Group also announced the creation of a new Chief Asset Officer role, with Ian Christie joining Pennon in May 2026.

Looking ahead, Pennon says the reforms proposed through the Cunliffe Review and the Government’s White Paper signal a new era for the UK water industry, one that places greater emphasis on transparency, accountability and long-term investment.

“Delivering on these expectations requires sustained focus, disciplined execution and strong collaboration across government, regulators and companies”, the Group says..

The Group has made a submission to Ofwat for a further c.£250 million of AMP8 investment in asset health, under the new ‘cost change process.’

Commenting on the results, Keith Haslett, Group Chief Executive Officer, said:

“I am delighted to have started my tenure as Chief Executive at Pennon, at what is an important moment both for the Group and for the wider UK water sector.

“As Pennon enters a new era under my leadership, it does so on the back of a return to profitability and the mobilisation of our AMP8 investment plan. However, it is clear that there is more work to do, and improving operational discipline and capital delivery will be important to meet the commitments we have made and the standards we aspire to achieve in the future.

“Focusing on operational excellence, driving a performance culture and delivering through technology and innovation will be my key priorities, to improve performance for our customers and the communities we serve.”